Transcorp Power Consortium acquires Afam Power for N105.3bn


By Onyinye Nwachukwu

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Transcorp Power Consortium, on Tuesday bought Afam Power Plc and Afam Three Fast Power for N105. 3bn, taking over the entire hundred percent Federal Government shareholding in the company put up for privatisation for a while now.

But with N19bn, Quest Electricity Company Limited acquired government’s 60% share in Yola Electricity Distribution Company in the deal also sealed on Tuesday.

While Quest Electricity was sole bidder for the Yola DISCO, three companies, Transcorp Power Consortium, Diamond Stripes Consortium and Unicorn Power Consortium bidded for the Afam Power Plc and Afam Three Fast Power,

The two successful companies emerged following commercial and financial bid opening for the privatisation of the power assets held in Abuja, which saw the Diamond Stripes Consortium and Unicorn Power Consortium to emerge 1st and second runner up, in what was seen as a transparent bids exercise.

In the first bids, all the companies failed to meet the reserve prices, thereby forcing the representatives of Chairman of Technical Committee of the National Council on Privatisation, Ayo Teriba to give bidders 15 minutes to revise their financial bids.

During the first bid rounnd, Transcorp Power Consortium bidded N85, 100,000,000.00, Unicorn Power Consortium, N95, 667,000,000.00, and Diamond Stripes’ N69, 270,690,420.95 as well as the Quest Electricity, which offered, N16, 777,777,777.

But the revise bid exercise saw the Transcorp Power Consortium raising its offer to N105.3bn; the Diamond Stripes Consortium offered to pay N102, 388, 150, 000; Unicorn Power Consortium, N101, 050, 000, 000 for the GENCO asset.

The sole bidder for Yola DISCO, Quest Electricity, which offered to pay N16, 777,777,777, was also asked to raise its offer to N19bn after it was told that it’s bid did not meet the reserve price set by the Bureau of Public Enterprise, BPE.

In his opening address, Director General of Bureau of Public Enterprise, BPE, Alex Okoh, recalled that, in line with the approval of National Council On Privatisation, NCP, the BPE had called for Expressions of Interest from prospective Bidders for the two power firms.

100% of the equity capital of Afam Power and that of Afam Three Fast Power Limited (ATFPL) jointly called Afam Power was to be sold.

On the other hand, 60% of the share capital of Yola Electricity Distribution Company, YEDC was reserved for the interested bidder.

Okoh recalled that at the deadline for the submission, EOIs were received from 12 firms and consortia for Afam Power.

According to him, “After the evaluation of the EOIs, nine firms obtained the qualifying mark and were consequently short listed to progress to the Request for Proposal (RfP) stage.

With regards to the Yola Disco transaction, EOIs were received from seven firms.

“After the evaluation of the submissions, five firms obtained the qualifying mark and were subsequently shortlisted to Progress to the Request for Proposal (RfP) stage. “

He said that in order to facilitate informed technical and financial bids, all the firms and consortia were provided access to virtual and physical data rooms, as well as site visits to the enterprises between 4th December 2018 and 25th January 2019.

The prospective bidders interacted with the management of the companies, and also conducted physical inspection of the plants and the franchise assets.”
“The deadline for the submission of the technical and financial bids was fixed for March 15th 2019.
“On the appointed date, BPE received techinical and financial proposals from three firms/consortia out of the nine pre qualified for Afam Power, and proposals for two firms out of the six pre qualified for YEDC.

“The Technical proposals were opened publicly to ascertain compliance with the requirements in the RfP. Bidders had been instructed to include a Bank Guarantee as a precondition for the receipt and evaluation of their bids. “

While Diamond Stripes Consortium, Transcorp Power Consortium; and Unicorn Power Generation Consortium submitted technical and financial bids for Afam Power, those for Yola Electricity Distribution Company, were Quest Electricity Nigeria Limited and Sandstream Nigeria Limited

However, Sandstream Nigeria Limited, failed to submit a Bank Guarantee along with its commercial proposal as required by the RfP. Consequently, Sandstream’s submission was declared non-responsive and rejected.

Onyinye Nwachukwu

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